Gold loan auction notice: your rights under RBI rules

In short

RBI's Lending Against Gold and Silver Collateral Directions, 2025 set rules lenders must follow before and during an auction of pledged gold.

Before the auction

• The lender must give you adequate notice to repay or settle before starting the auction. (Para 37)
• If it cannot find you, it must issue a public notice and wait one month before auctioning. (Para 37)
• The loan agreement must state the auction process and the notice period. (Para 26)

During the auction

• It must be announced in two newspapers: one regional language, one national. (Para 38)
• The reserve price must be at least 90% of the gold's current value; at least 85% if auctions fail twice. (Para 40) Example: say your gold is worth ₹1,00,000 today (made-up figures, for illustration only). Then the starting price at auction can't be below ₹90,000.
• The first auction must be held physically in the same district as the branch. (Para 41)
• The lender and its related parties cannot bid. (Para 42)

After the auction

• The lender must give you full details of the price and dues adjusted. (Para 43)
• Any surplus must be refunded within 7 working days of receiving the auction money. (Para 43)
• The lender may recover any shortfall as per the loan agreement.

Gold bachana hai? What you can do

Reply to the notice quickly. Ask for the exact dues. Ask about part-payment or renewal. Complain to the lender, then cms.rbi.org.in, if rules are broken.

Note: these Directions apply from the date each lender adopts them. Check with your lender.

Quick answer

Before auctioning pledged gold, the lender must give you notice to repay or settle, announce the auction in two newspapers, and set a reserve price of at least 90% of the gold's current value (85% after two failed auctions). Any surplus after the auction must come back to you. Respond to the notice quickly.

Real situations

Example: say you pledged gold for ₹80,000 (made-up figure), missed interest for months and got an auction notice with a 15-day date. Ask the lender in writing for the exact dues, and about part-payment or renewal, before the date.

Example: say your gold was auctioned and you received no statement. You can ask for full details of the sale price and dues adjusted, and any surplus refund.

Example: say you repaid in full but the branch keeps saying "come next week". Note the date of repayment; the 7-working-day limit applies.

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